Count me as one of those not surprised by Trump’s and Wilbur Ross’s success on the USMCA trade agreement. Anyone who has ever been around business understands Trump’s art of the deal well. A weak position at the start can only become weaker. I have never seen a deal start with the sort of conciliatory language the Obama administration seemed to go into every deal from nuclear to trade with. Apologizing for prior administrations was odd if not for the strange sense one got that Obama was always looking to be ‘liked’. Heaven knows Trump doesn’t carry that weight with him.
Standing firm and acting like he would go it alone with Mexico left Canada with a “my way or the highway” option. The fact that Ross made this what is essentially a pro-North American deal should play well going forward with finishing the EU free trade agreement when they see Trump is sincere about an deal needing to be a win-win. Most business people understand why one sided deals are not a good strategy for any contractual obligation that is not a one-time deal. If one side or the other realizes at some point in time they have been taken advantage of they typically arbitrarily break the deal with that line that is as old as the legal profession—“so just sue me”. Put together a deal where both parties think they are making out well and you have an incentive to never reach that point. So take it with a pillar of salt when those pseudo trade geniuses from the MSM start to pick apart the USMCA as they begin to see the details.
The part I think that is missed in how this trade deal was done was the brilliance with which Trump/Ross worked the socialist tendencies of our bordering countries. Canada and Mexico have both been conduits for primarily China to use NAFTA to bring their products in largely tariff free. Pointing out that they were both getting played by the globalists and that it was hurting their industries that employed union blue collar employees brought players from both countries into support of the new deal. Currently 24% of Mexico’s labor force is in industrial occupations and nearly 90% of those are union workers. Canada’s eastern provinces all have unionization rates over 35% and it does not take a trade expert to know that unions are not supportive of their country simply being a ‘pass thru’ for foreign goods where they ‘tighten a few bolts’ and make it NAFTA certified.
Trudeau, who was looking at flagging popularity, and Mexico’s recently elected socialist leader were sitting ducks for Trump’s strategy. Unwittingly they have joined Trump’s trade tiff with China. Now when China tries an end run through their countries it will be blocked. China is already in a recession. Let’s see how deep they are willing to let that recession get. The talking heads like to talk about China’s 1.4 billion population but seem to not recognize that China is not a country with a strong consumer base i.e. a large part of that population is still very poor. They need to sell goods to us much more than we need the few dollars it would save consumers to buy from them
